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Investing.com - BofA Securities has maintained its Underperform rating on Uniti Group (NASDAQ:UNIT) while raising its price target to $7.50 from $3.50. Currently trading at $7.16, InvestingPro analysis indicates the stock is undervalued based on its proprietary Fair Value model.
The price target increase reflects a higher multiple of 8x (previously 5.5x) applied to the company’s 2026 estimated adjusted EBITDA of $1.3 billion, according to BofA Securities. The firm justified the higher multiple based on fiber’s ability to gain broadband market share and current elevated interest in acquiring fiber assets. With a current EV/EBITDA multiple of 7.83x and last twelve months EBITDA of $892.63 million, InvestingPro data shows the company trading at relatively modest valuation multiples.
BofA’s updated price objective incorporates several factors including the 0.6029 exchange ratio effect on legacy Uniti shareholders, the issuance of 90 million Uniti shares to Windstream, and warrant issuance representing approximately 16 million dilutive shares.
The analysis notes that Uniti’s pro forma net debt stands at $8.3 billion, up from $5.3 billion previously, while pro forma adjusted EBITDA is $1.5 billion at the mid-point of Uniti’s guidance, implying leverage of approximately 5.5x.
Despite Uniti’s plans to accelerate its fiber build and capitalize on Hyperscaler demand for connectivity, BofA Securities maintains its Underperform rating, citing high leverage as a potential constraint on the company’s growth initiatives. While the company maintains healthy liquidity with a current ratio of 1.95, InvestingPro subscribers can access 10+ additional key metrics and insights through the comprehensive Pro Research Report, helping investors make more informed decisions about Uniti’s prospects.
In other recent news, Uniti Group reported its second-quarter 2025 earnings, which fell short of expectations. The company’s earnings per share (EPS) were reported at -$0.04, significantly missing the anticipated $0.116, resulting in a surprise of -134.48%. Additionally, revenue was reported at $300.73 million, slightly below the forecasted $304.19 million. Following these results, Raymond (NSE:RYMD) James raised its price target for Uniti Group from $8.00 to $11.00, maintaining a Strong Buy rating. The firm highlighted the company’s potential in the fiber-to-the-home (FTTH) sector, drawing comparisons to Frontier Communications (OTC:FTRCQ). These developments reflect recent movements and analyses surrounding Uniti Group.
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